Scottish Mortgage’s Record Rally Masks the Risky Wager on a Single Rocket

The euphoria surrounding Scottish Mortgage Investment Trust’s latest record high has already faded, but the forces that drove it remain firmly in place. Shares of the £14bn closed-end fund briefly touched 1,556 pence (€17.42) on Tuesday, eclipsing the previous peak of 1,544 pence set in November 2021. The trigger: Anthropic, the OpenAI rival in which Scottish Mortgage holds a 2.6% stake, formally filed for its initial public offering.

That bounce, however, proved short-lived. By Friday the stock had fallen back to €17.42 on the German exchange, a 2.7% daily drop that leaves it roughly 11% below its 52-week high. Even so, the trust has still gained more than 25% over the past twelve months.

Anthropic’s starbust revenue provides the spark

Anthropic’s IPO paperwork has crystallised what was previously a theoretical bet. Scottish Mortgage’s holding is now valued at about £400m, making it the tenth-largest position in the portfolio. More striking than the paper mark is the underlying business momentum: the AI company’s annualised revenue is believed to have surpassed $30bn, up from around $1bn only fifteen months earlier.

That dramatic scaling explains the market’s immediate reaction. An IPO would not only unlock liquidity for the trust but also provide a public test of whether the internal valuations assigned to private holdings can be sustained in the open market.

SpaceX inflates the NAV – and the concentration risk

Alongside Anthropic, the news flow from SpaceX has been equally transformative. The rocket company set its IPO offer price at $135 per share ahead of its planned listing on 12 June. That revaluation pushed SpaceX’s weighting in Scottish Mortgage’s portfolio from 17.9% at the end of April to 21.0% – by far the largest single position. As a result, the trust’s net asset value climbed to 1,493.98 pence per share.

Existing shareholders in SpaceX, including Scottish Mortgage, will be subject to a typical lock-up period of 90 to 180 days after the listing. That means the trust cannot immediately monetise its holding, leaving its performance hostage to SpaceX’s post-IPO trading.

The private strategy delivers – but at a price

Private companies now account for 41.3% of the total portfolio, a concentration that has paid off handsomely. In the fiscal year ending March 2026, the trust generated a NAV total return of 27.4%, easily beating the FTSE All-World Index’s 18.0% gain. Over a decade, the NAV return stands at 435% versus the benchmark’s 234%.

Should investors sell immediately? Or is it worth buying Scottish Mortgage Investment?

The strong performance has virtually erased the historic discount to NAV. In early June, the shares traded at a slight premium, prompting management to issue 3.85m new shares from treasury at 1,545.42 pence each – the first such issuance in a while.

Cost discipline helps: ongoing charges run at about 0.33% of average NAV, and there is no performance fee. Yet the flip side of the strategy is plain: when a single unlisted holding swells to more than one-fifth of assets, the entire trust’s valuation hinges on that one name’s trajectory.

A shareholder-approved cushion for further private bets

The trust’s long-standing commitment to private growth stocks remains undimmed. In the last fiscal year it invested £254m in unlisted companies, nearly double the £132m deployed a year earlier. New positions included Anthropic, animal-health biotech Loyal, and social platform RedNote, while existing holdings in Enveda, Redwood Materials and Zipline were topped up.

To maintain that agility, shareholders in April approved a relaxation of the 30% cap on private assets. The trust may now invest up to an additional £250m above that threshold, giving it the flexibility to participate in late-stage funding rounds at short notice – a capability that often separates early backers from later dilution.

The next catalysts – and the nagging unknowns

Anthropic’s IPO will be the first major test of the private portfolio’s pricing. A successful float would provide greater transparency on valuations, while a weak debut would reinforce the scepticism that surrounds the trust’s unlisted holdings. Meanwhile, SpaceX’s lock-up expiry later this year will determine when Scottish Mortgage can start to crystallise its huge unrealised gain.

For now, the market is betting that the IPO machines can keep printing records. But as the rapid pullback from the all-time high shows, those bets can reverse just as quickly as they materialise.